AIM Listed Mayan Energy Announce Positive Update From 1,000 bopd Asphalt Ridge Facility Investment

Update on investment in Deloro and Utah Heavy Oil Sands Project

Mayan Energy Ltd (AIM: MYN), the AIM listed oil and gas company, is pleased to provide an update on the Asphalt Ridge Project (‘Asphalt Ridge') a heavy oil sands deposit being developed by TSX listed Petroteq Energy Inc (‘Petroteq') (TSXVE:PQE OTC:PQEFF) in Utah, USA - see RNS dated 16 November 2017.


  • Deloro Energy LLC (‘Deloro') in which Mayan has a 17.6% interest, has completed the first US$2.5m tranche of its US$10million acquisition of a 49% interest in Asphalt Ridge.  The Asphalt Ridge Project is currently owned by TSX listed Petroteq Energy Inc (‘Petroteq') (TSXVE:PQE OTC:PQEFF)
  • Completion of the first tranche investment entitles Deloro to a 25% economic royalty from the Asphalt Ridge Project
  • All building and construction permits associated with the 1,000-barrel oil per day (“bopd”) oil extraction process facility at Asphalt Ridge have been granted
  • Construction progress update report provided by Petroteq on January 11, 2018 confirmed: 
    • Foundation work is completed
    • Assembly of the main structure has commenced with vertical columns in place
    • Trucking of oil heater, pipe valves and various pumps will shall begin week of January 15th.
    • Rocky Mountain Power has been engaged to determine the power upgrade to deliver power to site
    • The distillation column & trays are being fabricated off site for delivery at the end of January
    • Images of site progress may be viewed on the full PDF of announcement (see link above) as well as at
  • Completion of testing and analysis of the oil product has indicated a high range of diesel organics & low sulphur levels, which is anticipated to drive demand for the oil and resulting in a tighter pricing and possible premium West Texas Intermediate (“WTI”) 
  • Petroteq announced “Notices of Allowance” from both the United States and the Canadian Patent and Trade Mark and Intellectual Property offices in respect of its heavy oil sand extraction processes, this is a further step in protecting its proprietary rights to its heavy oil extraction technology
  • General increases in oil prices now imply Netbacks (oil sales net of royalties, production and transportation expenses) of US$35+ per barrel- compared with US$15-20 reported in November 2016
  • Asphalt Ridge has 87 Million Stock Tank Barrels ("STB") contingent resource in place and a defined development plan to produce 5,000+ bopd by 2019 
  • Petroteq, Deloro, Mayan and institutional investors are to visit Asphalt Ridge on 16th January 2018

Mayan CEO Eddie Gonzalez said: “We believe that the Asphalt Ridge project is going to be an excellent example of an investment which is low-risk, but with the potential to deliver highly attractive returns.  As we re-optimise Mayan's business model: focussing on increasing production in Texas and becoming cash positive in the short term, we are also considering strategic investment opportunities.  We are more than satisfied that Deloro's agreement to acquire a 49% stake in the Asphalt Ridge Project is progressing in a timely manner, and that developments on-site remain on target.  All indicators point towards the 1,000 bopd plant being commissioned in February 2018; propitious given the increasing demand for the oil produced.  Additionally, through Deloro, Mayan will have access to Petroteq's proprietary technology and we hope in due course to be able to roll this out to similar oil sand plays in Utah and elsewhere.   We will be on site in Utah next week to meet with Petroteq CEO, Aleksandr Blyumkin, his operations team and a group of institutional investors to inspect progress at the plant and to discuss future funding options and expansion.” 

The Asphalt Ridge project is the core asset of Petroteq (mkt. cap US$72 million).  It has 87 Million Stock Tank Barrels ("STB") contingent resource in place and a defined development plan to produce 5,000+ bopd by 2019.  Deloro's development agreement and alliance with Petroteq has enabled Mayan to gain exposure to the Project and is consistent with Mayan's strategy of completing key acquisitions and investments in highly prospective onshore oil and gas opportunities to generate value to shareholders. 

Mayan currently has a 17.6% interest in Deloro, which is acquiring 49% of Asphalt Ridge.  Petroteq has a defined development plan in place, with work underway to construct a plant that has an initial production target of 1,000 barrels of oil per day by February 2018.  This will utilise Petroteq's patented process technology that unlocks heavy oil without generating greenhouse gases or waste.  Analysis of the end product has indicated a high range of diesel organics as well as low sulphur or any other contaminants.  This is encouraging as there is high demand for low sulphur diesel from the trucking and shipping industries. The process is proven by Petroteq who produced and sold 10,000 barrels of oil in 2015 using this technology at its first facility in Maeser, Utah.

The incremental rises of production to 2,500 bopd and 5,000 bopd are expected to be largely funded through debt.  Importantly, six months of continuous production at 1,000 bopd triggers an upgrade of a materially significant portion of the existing 87 MMSTB Contingent resources to P1/P2 reserves.  It is anticipated that all in costs will be US$18-25 per barrel ("Bbl") and therefore expected to generate netback margins of US$20-27 per Bbl (at US$45 Bbl oil).  With WTI currently trading at US$63, the Board believes the Project economics have potential to improve significantly.

Overall, the Asphalt Ridge project offers attractive economics and net present values.  The below summary NPV values are for 100% of Asphalt Ridge and have been calculated by Chapman Petroleum Engineering Ltd (“Chapman”) at a 10% discount to WTI US$54 oil price.  It should also be noted that Chapman have assumed a US$10,500,000 capital commitment into their modelling for the completion of the 1,000 plant which is already funded.


Post tax

Cumulative Cash flows – US$ M

5% post tax

Cumulative Cash flows – US$ M

10% post tax

Cumulative Cash flows – US$ M

Best Estimate – 2,500 bbl/d plant




Low Estimate – 1,000 bbl/d plant




High Estimate - 5,000 bbl/d plant




Arithmetic Average




Arithmetic Average after risking




Technical sign off

The Technical information prepared by Chapman Petroleum Engineering as referred to in this announcement has been prepared in accordance with the standards set out in the Canadian Oil and Gas Evaluation Handbook ("COGEH") and the report has been prepared and/ or supervised by a "Qualified Reserves Evaluator" under NI 51-101.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.

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Mayan EnergyAIMDeloroUtahUnited StatesOil SandsAsphalt Ridge ProjectHeavy Oil SandsPetroteq EnergyProject UpdateDeloro Energy

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